Leases

The Company leases office, warehouse and multi-recreational facilities and certain equipment under non-cancelable operating leases. In addition to base rent, the facility leases generally provide for additional rent based on operating results, increases in real estate taxes and other costs. Certain leases provide for additional rent based upon defined formulas of revenue, cash flow or operating results of the respective facilities. Under the provisions of certain of these leases, the Company is required to maintain irrevocable letters of credit, which amounted to $5,492 as of December 31, 2017.

The leases expire at various times through May 31, 2038 and certain leases may be extended at the Company’s option. Escalation terms on these leases generally include fixed rent escalations, escalations based on an inflation index such as the consumer price index, and fair market value adjustments. In the next five years, or the period from January 1, 2018 through December 31, 2022, the Company has leases for 25 club locations that are due to expire without any renewal options, eight of which are due to expire in 2018, and 61 club locations that are due to expire with renewal options.

Future minimum rental payments under non-cancelable leases are shown in the chart below.



	Minimum Annual Rental
Year Ending December 31,
2018 (a)	$	96,518
2019 (a)		91,208
2020		85,129
2021		75,016
2022		62,933
2023 and thereafter		247,911

(a) For the years ending December 31, 2018 and 2019, future minimum rental payments include capital lease payments of $129 and $31, respectively.

Rent expense for the years ended December 31, 2017, 2016 and 2015 was $126,318, $124,952 and $124,920, respectively. Such amounts include non-base rent items of $24,881, $25,384 and $24,767, respectively. Including the effect of deferred lease liabilities, rent expense was $124,997, $124,333 and $123,872 for the years ended December 31, 2017, 2016 and 2015.

The Company, as landlord, leases space to third party tenants under non-cancelable operating leases and licenses. In addition to base rent, certain leases provide for additional rent based on increases in real estate taxes, indexation, utilities and defined amounts based on the operating results of the lessee. The sub-leases expire at various times through December 31, 2022. Future minimum rentals receivable under non-cancelable leases are shown in the chart below.



	Minimum Annual Rental
Year Ending December 31,
2018	$	1,367
2019	1,021
2020	761
2021	537
2022	99
2023 and thereafter	—

Rental income, including non-cash rental income, for the years ended December 31, 2017, 2016 and 2015 was $2,558, $2,338 and $4,669, respectively. For the years ended December 31, 2017, 2016 and 2015, such amounts included no additional rental charges above the base rent. The Company previously owned the building at the 86th Street club location which housed a rental tenant that generated rental income of approximately $1,926 for the year ended December 31, 2015. Refer to Note 9 - Sale of Building for further details.